Dispute over Parsons Brinckerhoff sale at heart of second Balfour/Carillion merger rejection

The dispute over whether Parsons Brinckerhoff should be sold was at the heart of the rejection of a second deal being tabled to merge Balfour Beatty and Carillion into a single super-contractor, it emerged this morning.

Balfour Beatty confirmed it had rejected a revised proposal put forward by Carillion at a meeting between the two on 3 August, after the failed first attempt at a merger.

The risks of derailing Balfour’s sale of Parsons Brinckerhoff, which Balfour believes remains a key strategic objective of the Group and is well advanced, was too high, it said. In its interim results, also announced today, Balfour Beatty said such a sale was expected to return £200M to shareholders.

Carillion mooted on 3 August to recompense bidders for the consultant if the merger deal fell apart and a sale was to continue.

But Balfour said the risks of a failed Parsons Brinckerhoff sale and the fragility of its UK construction revenue meant it had rejected the second proposal.

Carillion had yet to make any statement on the matter.

Update 9.15am Balfour Beatty executive chairman Steve Marshall in a statement to investors has said strong competitive interest is being maintained in Parsons Brinckerhoff and round three bids are expected shortly

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